Thank you, Mr. Chairman.
Members of Parliament, thank you very much for welcoming me here today to discuss an issue as vital as the supply of medication for the children of Quebec and Canada.
My name is Hugues Mousseau and I am the director general of the Quebec Association of Pharmacy Distributors. In this capacity, I represent the distributor-wholesalers in Quebec, who provide more than 16,000 deliveries each week to all hospitals and pharmacies in the province, whether in downtown Montreal, Blanc-Sablon, the North Shore, or even the Magdalen Islands.
As Quebeckers and Canadians, we have made the choice that all our citizens have access to the medicines they need, when they need them, no matter where they live. This is no small decision for a territory with one of the lowest population densities in the world.
For nearly a year, in Quebec, demand for over-the-counter analgesics has remained at nearly double the historical demand for these drugs. Although the major manufacturers have also managed to double their supply to our distribution centres, the strength of demand is preventing us from replenishing pharmacy and warehouse shelves at this time.
In plain English, everything we receive is immediately shipped to hospitals and pharmacies. The imports recently confirmed by Health Canada are welcome, and I would like to confirm at the outset that the issue of the language of labelling on imported products is a false debate. I will come back to this a little later.
Since the drug supply chain is complex, my aim today is to give you a brief overview of its main components, and then to conclude by giving you some possible solutions to better combat drug shortages.
The starting point of the drug supply chain is provided by the active ingredient factories, mainly located in South-East Asia and Eastern Europe. The chemical compounds from these plants are shipped to the drug manufacturers, who also package and market the products.
The wholesalers I represent buy almost all of the manufactured drugs and resell them at cost to pharmacies and hospitals. The wholesalers are paid according to a model set by the provincial governments. In Quebec, this takes the form of a fixed percentage of the list price of each drug.
This funding model applies consistently regardless of the region of drug distribution and regardless of the type of drug, whether it is narcotics from secure storage, refrigerated products, or cytotoxic drugs whose handling parameters are complex and highly specific.
In fact, Quebec and Canada can count on a drug supply chain that is among the safest and most efficient in the world. This is perhaps one of the most overlooked strengths of our health care system.
Six companies manage drug distribution centres in Quebec. Our members alone represent the most important bulwark against drug shortages. With multi-week stockpiles, strategic stockpiling and a keen understanding of market dynamics, our members can continue to meet the needs of Canadians even if a supply disruption occurs upstream in the chain.
However, this bulwark is now under threat. In recent years, extreme downward pressure on drug prices and a lack of predictability regarding market conditions have weakened the drug chain, with the direct consequence of increasing the number, frequency and duration of shortages.
In fact, according to calculations made by our association, the number of prescription drug shortages has quadrupled in five years in Quebec.
Since then, the problems of price cuts and lack of predictability have been compounded by issues related to inflation and the skyrocketing cost of fuel, in addition to the ever-increasing regulatory burden. Faced with this critical situation, wholesalers will have no choice but to consider reducing the number of weeks of drug stock and reducing the frequency of deliveries to pharmacies.
If the government does not act soon, the reform of the Patented Medicine Prices Review Board and the negotiations of the pan-Canadian Pharmaceutical Alliance will lead to further reductions in the list price of drugs, thereby amplifying the shortage problem. Yet viable alternatives have been proposed to the government and the PMPRB for three years.
Let me be very clear: wholesalers are in favour of price cuts for drugs if they do not undermine supply and innovation. In fact, there is already a mechanism in place across the country called listing agreements, which is a viable alternative for achieving savings while isolating the effect on the drug supply chain and shortages.
I would like to conclude my remarks with some additional observations and suggestions in relation to the shortage of pediatric analgesics and other medicines.
In our view, three concrete solutions will better equip us to respond to shortages in the future.
First, we must put an end to successive and unpredictable price cuts by focusing on contractual and financial mechanisms other than a reduction in the list price, such as listing agreements.
Secondly, we need to stop the critical erosion of distribution funding and reinvest in our supply chain to allow wholesalers to play their full role as a bulwark against shortages.
Finally, we need to work with wholesalers to establish national stocking strategies for critical medicines with a view to optimal stock management according to expiry dates.
Thank you.